Lynn Franco Spending Quotations

While the Index remains below its pre-Katrina levels, the shock of the hurricanes and subsequent leap in gas prices has begun wearing off just in time for the holiday season. Despite this latest boost in confidence, holiday spending will be driven by the bargains consumers have come to expect.

The sluggish economy, declining consumer confidence, widespread layoffs and the tragic events of Sept. 11 appear likely to hold down holiday spending as we head into the final five weeks of the year, ... But retail outlets offering the price-conscious consumer a good buy may fare better than projected.

Despite this latest boost in confidence, holiday spending will be driven by the bargains consumers have come to expect.

Consumers' confidence has been bolstered by the improvement in business and labor market conditions, ... The latest gains are striking. This new boom in confidence should translate into increased consumer spending and stronger economic growth ahead.

The lack of improvement in labor market conditions continues to dampen consumers' spirits, ... Despite September's retreat, consumers remain cautiously optimistic about the outlook for the next six months. Consumer spending is likely to continue at or near current levels.

The continued decline in the Present Situation Index suggests that consumers would tend to curb their spending in the absence of offsetting incentives, ... a significant deterioration in consumer attitudes.